Impact of Legal Services Act: ABS require detailed business plans
Well, October 6 has been and gone and the initial wave of alternative business structures (ABS) is in the pipeline.
The Council for Licensed Conveyancers (CLC) has announced that it is considering ABS applications and about 100 are expected by the CLC this year.
While it’s now unlikely the Solicitors Regulation Authority (SRA) will be in a position to license ABSs until January or February, those considering forming an ABS can gain useful insights from the new CLC guidelines, which contain valuable information on how to prepare.
Factoring in timescales for applications
Currently, the CLC anticipates two working days to consider a typical application – longer if there are ‘unusual or complex ownership structures’.
However, the guidance notes point out that most applicants can expect to be licensed 90 days after the CLC has received a complete application.
What it will cost and what you are required to do
Applicants must pay a non-refundable fee of £1,200, as well as £80 per hour for any time over the two days, plus the cost of advice the CLC deems necessary. Data verification checks must also be funded by applicants, including Criminal Records Bureau (CRB) checks. A cost of £100 per individual is anticipated.
The three-part, 49-page form requires applicants to demonstrate how they will satisfy the principles and outcomes in the CLC’s code of conduct and licensed body code. In addition, a detailed three-year business plan is needed.
The CLC can only license ABSs that want to do reserved conveyancing and probate work, not litigation or advocacy.
Implications for other types of ABS
While the SRA’s guidelines are likely to differ, those planning to form an ABS, and those seeking to protect themselves from ABS competition, should be using the next few months wisely. Detailed business plans and risk management planning will be essential, no matter what route you are planning to take.
Karen Hain is a partner and head of professional practices at Moore and Smalley